The Spy Who Loves Us

After Israeli spy Jonathan Pollard was sentenced to life in prison in 1986, the U.S. negotiated an understanding with Israel—a “gentlemen’s agreement” —stipulating that neither nation would thenceforth conduct espionage operations in the other’s territory without consent. But the agreement was a sham from the beginning. The Israeli government didn’t even honor its commitments in the aftermath of the Pollard case, failing to return the estimated 360 cubic feet of stolen information to enable the U.S. to conduct a damage assessment. The United States, for its part, continued to recruit and run agents inside Israel throughout the 1980s and 1990s. And it was known within the intelligence and counterintelligence communities that Israel did the same in the United States. David Szady, the FBI’s assistant director for counterintelligence, was so dismayed by the level of Israeli spying in the late ’90s that he called in the head of the Israeli Embassy’s Central Institute for Intelligence and Special Activities (Mossad) office and told him, “Knock it off.”

Pollard’s name was in the news again on April 22, when former U.S. Army weapons engineer Ben-Ami Kadish was arrested for passing secrets to Israel. Kadish had been an agent run by Yosef Yagur, who directed Pollard. Yagur, under cover as a science attaché at the Israeli Consulate General in New York, fled the U.S. in 1985 after Pollard was arrested, but remained in touch with Kadish.

The arrest revived suspicions that Israeli agents might still be operating inside the U.S., most particularly “Mega,” whose cover name was revealed in an NSA-intercepted conversation between two Israeli intelligence officers. “Mega” was clearly at the policymaker level, as Kadish and Pollard frequently sought files by name or number. Someone more senior in Washington appeared to be directing the Israeli handlers toward sensitive information. Whoever “Mega” was, he is still at large.

Israeli Foreign Ministry spokesman Arieh Mekel sought to play down the allegations, noting, “Since 1985 there have been clear orders from prime ministers not to conduct these kinds of activities.” The media obediently reported the disclaimer under headlines such as Agence France Presse’s: “Israel says no spying on US since 1985.” But the spokesman had not said that. He referred to “these kinds of activities,” possibly meaning the recruitment of American Jews to work as Israeli intelligence agents. Mekel’s half-hearted denial was a step removed from the Israeli government’s reaction to the 2004 investigation of the American Israel Public Affairs Committee, when then Prime Minister Ariel Sharon and Foreign Ministry spokesman Mark Regev insisted that Israel “does not spy on the United States of America.”

It’s possible that Israel has largely demurred from recruiting American Jews as spies, but Tel Aviv’s intelligence operations in the U.S. have undeniably continued. The magnitude of Israeli espionage is certainly known to some senior government officials and is hidden in classified files. But even evidence available in public records attests to widespread infiltration.

Spy operations run by a case officer directly involving a controlled agent are only one of many tasks delegated to an intelligence service. Other responsibilities might include tapping into communications networks, directing agents of influence in the foreign government who can enable favorable policy decisions, running covert actions that feed misleading information to the media, and arranging technology transfers that frequently rely on companies that are either fronts or co-operating with the intelligence service to obtain secret military or commercial information. Even if Israel has stopped recruiting American Jews—and that is by no means certain—it nevertheless continues to carry out many core intelligence operations in the United States.

Israel has little need to run agents of influence here as its intelligence officers, diplomats, and politicians already have unfettered access to policymakers. It has been reported that the Pentagon under Paul Wolfowitz and Doug Feith—both of whom have been investigated for passing classified information to Israel—took few steps to monitor Israeli visitors. Likewise, the Israeli Embassy has excellent access to the media. When it wants to plant propaganda or place stories intended to shape opinion in a direction favorable to Israel, the Mossad generally looks to the British press. Rupert Murdoch’s Times group of newspapers and the Daily Telegraph, formerly owned by Conrad Black, have featured many articles that clearly originated with Israeli government sources. Such pieces are often picked up and replayed in the United States.

Virtually every U.S. government body concerned with security has confirmed that Israeli espionage takes place, though it is frequently not exposed because FBI officers know that investigating these crimes is frustrating and does no favors for their careers. But Israel always features prominently in the annual FBI report called “Foreign Economic Collection and Industrial Espionage.” The 2005 report states, “Israel has an active program to gather proprietary information within the United States. These collection activities are primarily directed at obtaining information on military systems and advanced computing applications that can be used in Israel’s sizable armaments industry.” It adds that Israel recruits spies, uses electronic methods, and carries out computer intrusion to gain the information.

The focus on U.S. military secrets is not limited to information needed for the defense of Israel, as was argued when Pollard was arrested. Some of the information he stole was of such value that many high-ranking intelligence officers believe the Soviet Union agreed to the release of tens of thousands of Russian Jews for resettlement in Israel in exchange. In early 1996, the Office of Naval Investigations concluded that Israel had transferred sensitive military technology to China. In 2000, the Israeli government attempted to sell China the sophisticated Phalcon early warning aircraft, which was based on U.S.-licensed technology. A 2005 FBI report noted that the thefts eroded U.S. military advantage, enabling foreign powers to obtain hugely expensive technologies that had taken years to develop.

In 1996, ten years after the agreement that concluded the Pollard affair, the Pentagon’s Defense Investigative Service warned defense contractors that Israel had “espionage intentions and capabilities” here and was aggressively trying to steal military and intelligence secrets. It also cited a security threat posed by individuals who have “strong ethnic ties” to Israel, stating that “Placing Israeli nationals in key industries … is a technique utilized with great success.” The memo cited illegal transfer of proprietary information from an Illinois optics firm in 1986, after the Pollard arrest, as well as the theft of test equipment for a radar system in the mid-1980s. A storm of outrage from the Anti-Defamation League led to the Pentagon’s withdrawal of the memo, an apology that predictably blamed the language on “a low-ranking individual,” and a promise that no similar warning would be written again.

But the issue of Israeli spying would not go away. Soon after, the General Accounting Office, the investigative arm of Congress, completed an examination of espionage directed against American defense and security industries. The report described how Israeli citizens residing in the U.S. had stolen sensitive technology to manufacture artillery gun tubes, obtained classified plans for a reconnaissance system, and passed sensitive aerospace designs to unauthorized users. An Israeli company was caught monitoring a Department of Defense telecommunications system to obtain classified information, while other Israeli entities targeted avionics, missile telemetry, aircraft communications, software systems, and advanced materials and coatings used in missile re-entry. Independently, a Defense Department source confirmed the GAO report, citing “dozens of other spy cases within the U.S. Defense industry.” The GAO concluded that Israel “conducts the most aggressive espionage operation against the United States of any U.S. ally.”

In early 2001, several federal government agencies noticed a series of intrusive approaches by Israelis who were ostensibly selling paintings. In June, the Drug Enforcement Administration made a compilation of the activities of the so-called “art students” in a classified report, which was later leaked. The report documents 125 specific attempts by Israelis to gain entry to government offices, residences of government employees, and even Defense Department facilities between January and June 2001. The Israelis “targeted and penetrated military bases” and were observed trying to enter federal buildings from back doors and parking garages. One detained Israeli was caught wandering around the federal building in Dallas with a detailed floor plan in hand. Many of those arrested were found to have backgrounds in “military intelligence, electronic surveillance intercept, or explosive ordnance units.”

Now, there may have been an Israeli student subculture in the U.S. selling cheap reproductions. But it is also clear that the art-student mechanism was used by intelligence officers to provide cover for espionage. The students were organized in cells of eight to ten members that traveled in vans, which provide concealment for electronic equipment. Several of the students were able to afford expensive airline tickets to hop from plane to plane, two of them flying in one day from Hamburg to Miami, then to Chicago, and finally winding up in Toronto on tickets that cost $15,000 each. In Miami and Chicago, they visited two government officials to try to sell their art. Another student had in his possession deposit slips for $180,000. Six students used cellphones provided by a former Israeli vice consul. Many claimed to be registered at either the University of Jerusalem or the Bezalel Academy of Arts in Jerusalem, but not a single name could be connected to the student body list of Bezalel, and there is no University of Jerusalem.

It is plausible that the art students who were actually intelligence officers might have been seeking entry to DEA facilities to gain access to confidential databases. If the broader Israeli espionage effort was focused on Arabs in the United States, such information would be invaluable. The DEA report concluded cautiously that the Israelis “might well be engaged in organized intelligence gathering.” Of the 140 art students arrested, most were deported for immigration violations. Some were just let go.

And then there are the movers. Urban Moving Systems of Weehawken, New Jersey was largely staffed by Israelis, many of whom had recently been discharged from the Israeli Defense Forces. As has been widely reported, three movers were photographed celebrating in Liberty State Park against the backdrop of the first collapsing World Trade Center tower. The celebration came 16 minutes after the first plane struck, when no one knew that there had been a terrorist attack and the episode was assumed to be a horrible accident. The owner of the moving company, Dominik Suter, was questioned once by the FBI before fleeing to Israel. He has since refused to answer questions.

Whether the movers and the art students had jointly pieced together enough information to provide a preview of 9/11 remains hidden in intelligence files in Tel Aviv, but the proximity of both groups to 15 of the hijackers in Hollywood, Florida and to five others in northern New Jersey is suggestive.

Speculation about 9/11 aside, it is certain that Urban Moving was involved in an intelligence-collection operation against Arabs living in the United States, possibly involving electronic surveillance of phone calls and other communications. When they were arrested, the five Israelis working for Urban Moving had multiple passports and nearly $5,000 in cash. They were held for 71 days, failed a number of polygraph exams, and were finally allowed to return to Israel after Tel Aviv admitted that they were Mossad and apologized.

Between 55 and 95 other Israelis were also arrested in the weeks following 9/11, and a number were reported to be active-duty military personnel. The FBI came under intense pressure from several congressmen and various pro-Israel groups to release the detainees. The order to free them came from Judge Michael Mukasey, now the U.S. attorney general. An FBI investigator noted, “Leads were not fully investigated” due to pressure from “higher echelons.” According to one source, the White House may have made the final decision to terminate the inquiry. Though the investigation could have gone much farther, the FBI identified two of the Weehawken movers as Israeli intelligence officers and confirmed that Urban Moving was a front for Mossad to “spy on local Arabs.” One CIA officer involved in the investigation concluded, “The Israelis likely had a huge spy operation.”

In May 2004, there were two incidents involving Israelis in moving vans in proximity to U.S. nuclear facilities. One occurred in Tennessee near the Nuclear Fuel Services plant, which reprocesses nuclear waste from hospitals. The van was pursued by the local sheriff for three miles after refusing to pull over. The two fleeing Israelis, who threw a bottle containing an accelerant, had in their possession Israeli military ID’s and false U.S. documents. In the second incident, two movers in a van tried to enter the Kings Bay Naval Submarine Base in Georgia, which is home to eight Trident nuclear submarines, but were arrested when dogs detected drugs inside their vehicle. The men had military ID’s and false documents. There was no follow-up by the FBI even though both incidents were reported to federal authorities.

There have also been reports of intensive targeting of U.S. government facilities overseas. In late 2001, State Department security noted a series of incidents at diplomatic missions and military bases, all involving Israelis. It described many of the incidents as “bizarre.” In one instance, French police arrested several Israelis at 2 a.m. after they were observed taking numerous photos of the U.S. embassy in Paris. As it was dark, their behavior was unusual to say the least—or perhaps not since it was revealed that the Israelis were using infrared film to detect communications equipment in the embassy.

In August 2004, the media discovered an FBI investigation, begun in 1999, involving Pentagon intelligence analyst Larry Franklin. He had openly met Israeli Embassy intelligence officer Naor Gilon as well as two AIPAC officials, director Steve Rosen and chief analyst Keith Weissman. He pleaded guilty in October 2005 to revealing classified information and is now serving a 12-year prison sentence. Rosen and Weissman are currently on trial. If the prosecution is correct, Franklin passed classified information relating to Iran to both AIPAC employees, who in turn provided the information to the Israeli Embassy. The defense has argued that such exchanges are routine in Washington, particularly between close allies such as Israel and the U.S., but that is a dubious reading of events. Passing classified information and documents is not the same as casual political conversation over a cup of coffee. If Israel had stopped spying on the United States, Gilon should have refused to receive the information provided by Franklin. He might even have gone through official channels to report Franklin’s activity. He did neither. Nor did Rosen and Weissman object when they received information that they knew to be classified. Instead, they passed it on to the Israelis.

In June 2006, it was revealed that the Pentagon had begun to deny security clearances to American Jews who had family in Israel. Israelis seeking security approval to work for American defense contractors were also finding it increasingly difficult to obtain clearances. A Pentagon administrative judge overruled an appeal by one of the Israelis, stating, “The Israeli government is actively engaged in military and industrial espionage in the United States. An Israeli citizen working in the US who has access to proprietary information is likely to be a target of such espionage.”

Israel conducts much of its high-tech spying through its corporate presence in the United States. It is heavily embedded in the telecommunications industry, which permits access to the exchange of information. The Whitewater investigation revealed that President Bill Clinton warned Monica Lewinsky that their phone-sex conversations might have been recorded by a foreign government. That foreign government would have been Israel, where government and business work hand-in-hand in the high-tech sector, and many former government officials and military officers hold senior management positions. The corporations, in return, receive large contracts with the Israeli government and the Israel Defense Forces.

Two Israeli companies in particular—Amdocs and Comverse Infosys, both of which are headquartered in Israel—do significant business in the United States. Amdocs, which has contracts with the 25 largest telephone companies in the U.S. that together handle 90 percent of all calls made, logs all calls that go out and come in on the system. It does not record the conversations themselves, but the records provide patterns, referred to as “traffic analysis,” that can provide intelligence leads. In 1999, the National Security Agency warned that records of calls made in the United States were winding up in Israel. Amdocs also has an apparent relationship with some of the art students who were arrested in 2001. Several were provided with bond money by an Amdocs executive.

Comverse Infosys provides wiretapping equipment to law enforcement throughout the United States and also has large contracts with the Israeli government, which reimburses up to 50 percent of the company’s research and development costs. Because equipment used to tap phones for law enforcement is integrated into the networks that phone companies operate, it cannot be detected. Phone calls are intercepted, recorded, stored, and transmitted to investigators by Comverse, which claims that it has to be “hands on” with its equipment to maintain the system. Many experts believe that it is relatively easy to create a so-called “back door” that permits the recording to be sent to a second party, unknown to the authorized law-enforcement recipient. And Comverse equipment has never been inspected by FBI or NSA experts to determine whether the information it collects can be leaked, reportedly because senior government managers block such inquiries.

According to a Fox News investigative report, which was later deleted from Fox’s website under pressure from various pro-Israel groups, DEA and FBI sources say that even to suggest that Israel might be spying using Comverse “is considered career suicide.”

A number of criminal investigations using Comverse equipment have apparently come to dead ends when the targets abruptly change their telecommunications methods, suggesting at a minimum that Comverse employees might be leaking sensitive information to Israeli organized crime.

The chickens occasionally come home to roost. In 2002, Israeli espionage might have been directed against the U.S. Congress, which has so assidiously ignored Tel Aviv’s spying. Congressman Bob Ney, currently in prison for corruption, arranged a noncompetitive bid for the Israeli telecommunications company Foxcom Wireless to install equipment to improve cellphone reception in the Capitol and House office buildings. Foxcom, based in Jerusalem, has been linked to imprisoned lobbyist Jack Abramoff. Telecommunications security experts note that equipment that can be used to enhance or improve a signal can also be used to redirect the phone conversation to another location for recording and analysis. The possibility that someone in the Israeli Embassy might be listening to congressmen’s private phone conversations is intriguing to say the least.

Some might argue that collecting intelligence is a function of government and that espionage, even between friends, will always take place. But the intensity and persistence of Israeli spying against the United States is particularly disturbing since Israel relies so heavily on American political and military support. Other allies like Britain, France, and Germany undoubtedly have spies in Washington, but there is a line that they do not cross.

Given the stakes involved, it would be reasonable for the United States to quietly offer Israel’s leaders a choice. They can continue to receive billions of dollars in aid, or they can persist in spying against their greatest benefactor. They should not be permitted to do both.

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Philip Giraldi, a former CIA Officer, is a fellow at the American Conservative Defense Alliance.

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